A passive portfolio management strategy is appropriate when
A) Capital market is inefficient
B) Investors have a unique investment philosophy
C) Investors have short investment horizons
D) Attempting to perform as well as the overall market on a risk-adjusted basis
E) All of the above

Question

Quizplus · Accepted Answer

A passive portfolio management strategy is appropriate when attempting to perform as well as the overall market on a risk-adjusted basis. This strategy involves investing in a diversified portfolio of securities that aim to replicate the performance of a market index, rather than trying to outperform it. It is a low-cost, low-risk approach to investing, and is often used by investors who do not have the time, expertise, or resources to actively manage their investments.

A Passive Portfolio Management Strategy Is Appropriate When